Industry Profile:John Scher

 By Larry LeBlanc

This Week In The Hot Seat With Larry LeBlanc: John Scher

In the midst of concern about the consolation of the concert business, and the apparent death rattle of the traditional record industry, Metropolitan Talent co-CEO John Scher figures there are considerable opportunities for his multifaceted entertainment company.

In 2001, the veteran New Jersey concert promoter formed a partnership with former A&M Records chairman/CEO Al Cafaro and created a diversified firm that oversees: the management of Bruce Hornsby and Art Garfunkel, and co-management of Little Feat; Hybrid Recordings (Johnette Napolitano, Assembly of Dust, and Jen Chapin); and a concert division, Metropolitan Talent Presents.

The company's theatrical productions include such Broadway hits as "Jelly's Last Jam," "Damn Yankees," "Victor/Victoria," and the off-Broadway hit "Thwak." Its TV productions include "My Favorite Broadway," starring Julie Andrews, "A Tribute to Muddy Waters: King of the Blues," "Carnegie Hall Salutes The Jazz Masters," "Elvis: The Tribute," and "Woodstock '94."

"Liza's At The Palace...!," produced by John Scher/Metropolitan Talent and Jubilee Time Productions, opens with Liza Minnelli Dec. 3rd at the Palace Theatre in New York for a limited Broadway engagement through Dec. 14th.

In conversation, Scher rattles off an impressive parade of career triumphs, including: the Grateful Dead's 15th anniversary at the University of Colorado in 1980; two Woodstock Festivals, particularly in 1994; producing the first concert at the newly-completed 78,000 seat Giants Stadium in 1978; producing six Bruce Springsteen shows for the opening of Meadowlands Arena (now the Izod Center) in 1981; the Amnesty International benefit show at Giants Stadium in 1985; and the pair of Frank Sinatra 75th birthday concerts at the Meadowlands Arena in 1990.

While an undergraduate at Brooklyn College, Scher got his first taste of the concert business. With his then partner Al Hayward, and operating as Monarch Entertainment Bureau (a title acquired from a retiring agent/manager), Scher produced shows in various New Jersey locations, including Wall Stadium.

Scher's company, later renamed Metropolitan Entertainment, came to acquire the rights to produce shows at The Capitol Theater in Passaic, New Jersey. Built in 1926 as a vaudeville house, The Capitol, with seating for up to 3,500 people, had also served as a movie theater.

With shows by the Rolling Stones, the Who, the Grateful Dead, Aerosmith, Warren Zevon, Southside Johnny and the Asbury Jukes and hundreds of others, The Capitol became a legendary rock and roll landmark over an 18 year run under Scher.

At the same time, Metropolitan Entertainment grew by expanding into upstate New York, and Connecticut and into New York, with shows at Madison Square Gardens and smaller venues like the Beacon and Irving Plaza while promoting regularly at the Meadowlands Arena. The company also produced national tours with the Grateful Dead.

In 1989, Polygram acquired a minority share of Metropolitan Entertainment, and Scher became president of Polygram Diversified, where he was responsible for Polygram's expansion into live event promotion, artist merchandising, sponsorships, and television production.

After Covanta Energy acquired Metropolitan Entertainment in 1995, Scher continued to run the company until his departure in 2001. In 2002, Clear Channel Entertainment acquired many of the assets of Metropolitan Entertainment, including a disputed non-compete agreement that covered Scher's activities as a concert promoter. After a legal battle, Scher was eventually able to relaunch himself in the concert business.

Is concert promotion the correct term for your business today? It has never described my business. My business has been multi-faceted for 30 years. We've always been in the management business. For a long time, we've had a small boutique record company, Hybrid. And we do Broadway shows.

There was a time when the North American concert field was divided into 20 or so empires, local promoters with strong regional roots. That structure began to disintegrate in 1989 when Michael Cohl's Concert Promotions International bought the tour and merchandising rights to the Rolling Stones' Steel Wheels Tour and basically told the local promoters, "Here's the deal." You are absolutely right. It changed when Michael wrestled the Rolling Stones' representation away from Bill Graham. Graham followed the old system. When the Stones toured, Graham partnered with each local guy. The local guy was expected to hold his own, and put up half of the money. We did the same thing representing the Grateful Dead. We partnered with (local) promoters, except in markets where we were the dominant promoter. But Michael Cohl changed all of that. Michael Cohl changed a lot of things.

Michael Cohl's linkup with the Rolling Stones was made possible by Labatt Breweries of Canada reportedly investing $25 million in CPI. Once there was big-time outside money, whether it be Wall Street money or Anschutz Corporation money, that didn't have any emotion tied to it, and concert producers were playing with other peoples' money, you could have a different view of what you were going to do on a North American scope.

You have argued that the proliferation of a single entity booking national tours and the consolidation of the music and touring industries haven't been healthy for the entertainment business. The music industry, and the live industry specifically, has evolved tremendously since consolidation. There is a lot of Wall Street money in the entertainment business today. I don't think it belongs there. The music business, certainly the concert business, is entrepreneurial by nature. With corporitization, you lose something. It is very hard today to find a mainstream promoter with one of the big companies that has the feel that their predecessors had--even as recently as the early '90s.

For the most part people at the two big companies [Anschutz Entertainment Group (AEG) and Live Nation] don't operate like they are stake holders. There are good people working there but their thought process is different than when it was your own money. It doesn't mean they don't work hard. Some do, some don't. But their thought process is different. It's a job.

The Ticketmaster/ Front Line Management deal happened because of today's consolidation environment. Consolidation has not worked in our industry. Clearly, the economic model has fallen apart and, for any number of reasons, artist development has taken a bad hit. There's probably been more one hit wonders in the last decade than in the 1950s.

First of all, look at amphitheatre and arena headliners--a significant majority of those acts first broke in the '60s. The Who and the Rolling Stones are still out there and the others are from the '70s and the '80s. The number of (headlining) acts that broke in the '90s, you can count on both hands, and maybe a couple of toes.

For the most part, Live Nation has been showing losses. This is a company that represents 60 to 70 percent of the major shows in North America. You have to assume that most everybody below them is losing money too or not making an appropriate amount of money. Who are we fooling?

What will be the industry impact of Ticketmaster Entertainment? It all depends on how they wield their power. My guess is that (the deal) is going to be a good thing for Ticketmaster, and a good thing for the industry. Obviously, it's too early to tell. But with the challenge Ticketmaster has before them, and with the lines being blurred between promoter, record company, manager etc., I'd bet on Irving Azoff [CEO, Ticketmaster Entertainment]. He is one of the smartest guys I've ever met. He's a consummate executive, and a guy who makes everybody in the room feel good. But he's also a shark. He didn't get successful and wealthy by being benevolent.

Is there a role for indie promoters today? Yes. I think what happened was that Clear Channel and then Live Nation upped the ante so high, and AEG followed, that independent promoters, if they want to compete for acts like AC/DC or Metallica or any big act who chooses not to do national tours, they have to match that service, and match that deal.

There used to be separation of concert promotion and music distribution. Now there's more intermingling between parties. There is more intermingling because there are companies and entrepreneurs who want to be involved in all aspects. One of the current problems is that while major record companies are wanting to sign these 360 deals, they are not very involved anymore in the artist development business. They can't afford to be. No one today has really picked up artist development in a big way.

The relationship between concert producers, and major record company executives was a very close knit one for years. They were very dependent on each other. Record companies, artist managers and artists relied on local and regional promoters to do the work that paved the way for successful (artist) careers.

With Live Nation and others making 360 deals that include tours, records, merchandising, licensing and other income steams, where do music labels fit in? About 85% of the (physical) music still goes through their system. Nobody has proven that a 360 deal works yet. Nobody has gone through a cycle on any major act to know whether it is successful or not.

The average young band is still going to want to sign with a label. There's the comfort of having the money to market themselves. But many are finding out very quickly that labels forcing these types of deals are doing nothing but paying money and taking rights.

I've had a number of interesting meetings with record company presidents and CEOs. I've said to each of them that I don't think 360 deals work in the long term. They said, "We can't make money the way it is with pirating and everything." But I told them, "You are not offering any services."

Aren't there chinks in 360 deals? A record label doesn't know the concert business and a promoter doesn't know music distribution. Until record companies have real in-house expertise or excusive output deals with promoters, merch companies, etc., I don't think it works.

But this could be a great opportunity for artist development because (labels) will have a stake in everything. They may have an act that only sells 150,000 albums and can then put more money up and do another record, invest in merchandising, invest in the visual part of the act's career, and bring them to every major market in North America three times over a year. Not just do a 40 date tour and make another record. But tour the act three times over a year or 18 months and let the band develop as a live act, and let the audience develop for them. The next record might sell 500,000 albums. Probably, for sure, it will sell 250,000 to 300,000. Then the act might have a career.

Wasn't working with PolyGram almost a model for the 360 deals being discusssed today? I was at the forefront of 360 deals before they were called that. In 1989, PolyGram bought half of my company and we started PolyGram Diversified Entertainment. We built the second largest music merchandising company in the world. We produced shows on Broadway. We produced pay-for-view television shows. We were promoters and we were managers.

But we didn't sign acts for all of rights. With various [PolyGram-affiliated labels] PolyGram, A&M, Mercury, Island etc., we signed artists or re-signed artists and did everything we could to convince them to be with us in other areas. It started to work and it might have been massively successful but the senior management of PolyGram in the mid-90s became enamored with the movie business and took all their resources outside music and tried to become a Hollywood studio. That failed miserably -- It was probably the straw that broke the camel's back and probably why PolyGram got sold.

You could argue that here were 360 deals in the '40s and '50s with MCA Inc. being in the talent agency business as well as interests in Decca and Universal-International. That only ended in 1962 when the Justice department filed its antitrust suit.

You are absolutely right. In the '50s and '60s, the Justice Department stopped everything. In the '90s the Justice Department approved everything. So all of the power is now consolidated in fewer places.

With Michael Cohl [CEO of the Live Nation Artists division and chairman of Live Nation's board of directors] and Bob Ezrin [Chairman, Live Nation Artists Recording Division] leaving LiveNation, I wonder if they will third party music distribution. That's a different world for Michael Rapino [pres./CEO, Live Nation] to get into. It appears that (Live Nation) made that decision [to third party] when they let Cohl go. They dissembled the infrastructure that he was building. When their 360 deals kick into place fully, when they have all of the rights, it will be interesting to see what they do. I suspect they will farm it out to a third party.

They might build an infrastructure but, just like the record companies, they are likely going to find out that the live part of an artist's career isn't just throwing a tour together and putting tickets on sale. You need real management expertise.

Is that why you have kept Hybrid as a boutique label? It's like you're putting your toe in the lake but not fully. You've only put out a couple records a year. We've put together a model that we think we can make a very significant profit with by being in the artist development business. We are going to roll it out at the very end of the year or the first quarter of next year. It is very artist development intensive.

You opened The Capitol Theatre in 1971 the same year that Bill Graham closed The Fillmore East in New York. His final concert took place on June 27, 1971. We opened The Capitol in Dec. 1971 with J. Geils Band and Humble Pie. That was the first opportunity where I could spread my wings a bit. It proved that Jersey was a separate market. It might have been right across the river but 7 million people lived in northern New Jersey in the old 201 area code. We carved out that niche, The Capitol Theatre gave me enormous joy. It was successful from the first day it opened and I'm sorry we closed it after 18 years.

You were the first promoter into Giants Stadium in 1978; and you were involved with the Meadowlands Arena opening in 1981 with 6 concerts with Bruce Springsteen It was huge going into Giants Stadium with the Beach Boys, Steve Miller, Pablo Cruise [and Stanky Brown]. It was brand new. And Springsteen's shows at Meadowlands were incredibly exciting, a real homecoming.

In those days I didn't go into New York. I respected the territoriality of Ron Delsener [then with Delsener/Slater Enterprises, Delsener now serves as Chairman of Live Nation New York of Live Nation.] It wasn't until Meadowlands opened when Ron decided that I should partner all of my shows there with him (that I began to work in New York). We were quite friendly up to that point.

Were you nervous handling Frank Sinatra's 75th birthday at the Meadowlands Arena in 1990? I played him for a number of years before that. But that was a great event. The opening of the Meadowlands Arena, it was hoped it would be Sinatra for the first night, with subsequent nights with Bruce Springsteen. I worked on that for more than a year, and it got rejected by Sinatra's people. Gambling had just started in Atlantic City, he had an incident there and got barred from the casino. So he swore he'd never play in New Jersey again. A few years after Meadowlands opened, we were able to book him. At that point Sinatra wasn't doing a lot of arenas. (His management) wasn't sure the show could sell out. I said, "You guys are nuts. This is New Jersey. This show will sell out in a day." It sold out in a half hour.

The story of Sharon Osbourne attacking you in the '80s has become industry folklore. What happened? She kicked me in the balls is the story. It had to do with settlements from two shows with Ozzie Osbourne. We had a letter from Sharon saying we could deduct money from a second show. (After a dispute over payment) I walked over to her and asked if I could talk with her. She broke into a rage, screaming, and cursing. I said, "Calm down." and she threatened to pull Ozzie offstage. I said, "Be my guest but your equipment will live in Asbury Park for as long as it takes me to auction it off." Then she very calmly walked over me -we're 10 feet apart—and I'm figuring we're going to get out of this situation. Instead, she kicks me in the nuts, and knocks me down.

A number of years later, Sharon is being represented by [New York entertainment lawyer] Paul Schindler He calls me up and say they'd like to talk about doing a worldwide record and merchandising deal with PolyGram (for Ozzie). I hadn't seen Sharon since that crazy day. At the time she was overweight and poorly dressed.

Into my office walks this relatively thin woman who is dressed impeccably in expensive clothing and jewelry and pocket book. It didn't even look like her. We had a nice and lengthy meeting, a bunch of follow-up phone calls, but at the end of the day, there wasn't a deal to be made. One would think the hatchet was buried. Afterwards, she told this story in Rolling Stone.

Sharon has spun this story to make me look like I'd done something wrong. But I know the truth and everybody who was there knows the truth.

To produce on Broadway must be very challenging. It has become much tougher on Broadway. It is still rewarding but it is very expensive and the odds of making a profit are not with you. I haven't done anything since Victor/Victoria 8 years ago.

Why do it? You do it because you are nuts or you believe you've got the one. When you have a hit, there's a lot of money to be made. You'd rather own a piece of "Cats," "Phantom of the Opera" or "Les Miserable" than any other entertainment property in the world. I had a small investment in "Rent" and every month I still get a cheque. Working with actors, and the creative forces on a Broadway show is also very rewarding as a producer. They actually think they work for the producer. Your opinion counts. In the one night concert business, you are lucky if (artists, agents and managers) give you enough oxygen to stay alive.

Larry LeBlanc was the Canadian bureau chief of Billboard from 1991-2007, and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications, including Time, Forbes, the London Times, and the New York Times.